Build local capability to strengthen supply chain resiliency
Over the years supply chains have become increasingly globalised as they work to leverage massive economies of scale. But supply chain managers have to remember that every link in the chain is vital. Building strong local capacity gives supply chains the ability to react and innovate at the local level, because they’re better able to engage with partners and customers to develop and implement new solutions.
The APAC region presents unique challenges due to its size and the diversity of its regulatory environment. Janssen Pharmaceutical Companies of Johnson & Johnson serves more than 10 markets with more than double the number of regulatory systems. The distances and time zones covered are also immense compared to other regions, with three hours difference between Sydney and Singapore, and eight hours flight time. Recognising the unique structure in Asia Pacific, the supply chain at Janssen started an ambitious program to be closer with its customers and patients by growing regional and local capability. This effort, which started before the COVID-19 pandemic, has been a key success throughout 2020 as teams were agile in reacting to market needs while finding creative solutions to global challenges.
"Supply chains will need to continue to leverage global strengths in driving technology, standards, common processes and practices. But we will also need to act locally"
Traceability in Australia
In Australia, our team is building a sustainable supply chain by growing capabilities that will improve responsiveness and the security of shipments. The team started to trial a track and trace program that aims to monitor the flow of a finished product from sourcing site to the patient. The traceability should generate critical information that can be shared quickly with internal and external stakeholders, especially in times of crisis. With the detailed, accurate and up-to-the minute information, stakeholders within the supply chain should be able to trigger an effective end-to-end response to ease the added pressure on supply chains, thus enabling well-informed decisions and optimising stock allocation.
For sensitive shipments, such as medicines that are considered controlled substances, we are preparing an additional layer of security. The team in Australia is initiating a trial in the second half of 2021 to monitor every pallet of controlled product with an Internet of Things (IoT) enabled device that provides real-time updates about the shipment location. Building these capabilities in Australia gets us closer to our local patients and customers, giving us greater insights into their needs. This also helps us provide value, reduce our costs, and maintain reasonable prices to enable sustainable growth.
Supply chains will need to continue to leverage global strengths in driving technology, standards, common processes and practices. But we will also need to act locally by providing a single point of contact for partners to help drive growth, understanding and translating local customer needs and market priorities, and consistently delivering on our standards and addressing local opportunities.
Biden establishes Supply Chain Disruptions Task Force
The US government is to establish a new body with the express purpose of addressing imbalances and other supply chain concerns highlighted in a review of the sector, ordered by President Joe Biden shortly after his inauguration.
The Supply Chain Disruptions Task Force will “focus on areas where a mismatch between supply and demand has been evident,” the White House said. The division will be headed up by the Secretaries of Commerce, Transportation, and Agriculture, and will focus on housing construction, transportation, agriculture and food, and semiconductors - a drastic shortage of which has hit some of the US economy’s biggest industries in consumer technology and vehicle manufacturing.
“The Task Force will bring the full capacity of the federal government to address near-term supply/demand mismatches. It will convene stakeholders to diagnose problems and surface solutions - large and small, public or private - that could help alleviate bottlenecks and supply constraints,” the White House said.
In late February, President Biden ordered a 100 day review of the supply chain across the key areas of medicine, raw materials and agriculture, the findings of which were released this week. While the COVID-19 health crisis had a deleterious effect on the nation’s supply chain, the published assessment of findings says the root cause runs much deeper. The review concludes that “decades of underinvestment”, alongside public policy choices that favour quarterly results and short-term solutions, have left the system “fragile”.
In response, the administration aims to address four key issues head on, strengthening its position in health and medicine, sustainable and alternative energy, critical mineral mining and processing, and computer chips.
Support domestic production of critical medicines
- A syndicate of public and private entities will jointly work towards manufacturing and onshoring of essential medical suppliers, beginning with a list of 50-100 “critical drugs” defined by the Food and Drug Administration.
- The consortium will be led by the Department of Health and Human Services, which will commit an initial $60m towards the development of a “novel platform technologies to increase domestic manufacturing capacity for API”.
- The aim is to increase domestic production and reduce the reliance upon global supply chains, particularly with regards to medications in short supply.
Secure an end-to-end domestic supply chain for advanced batteries
- The Department of Energy will publish a ‘National Blueprint for Lithium Batteries’, beginning a 10 year plan to "develop a domestic lithium battery supply chain that combats the climate crisis by creating good-paying clean energy jobs across America”.
- The effort will leverage billions in funding “to finance key strategic areas of development and fill deficits in the domestic supply chain capacity”.
Invest in sustainable domestic and international production and processing of critical minerals
- An interdepartmental group will be established by the Department of Interior to identify sites where critical minerals can be produced and processed within US borders. It will collaborate with businesses, states, tribal nations and stockholders to “expand sustainable, responsible critical minerals production and processing in the United States”.
- The group will also identify where regulations may need to be updated to ensure new mining and processing “meets strong standards”.
Partner with industry, allies, and partners to address semiconductor shortages
- The Department of Commerce will increase its partnership with industry to support further investment in R&D and production of semiconductor chips. The White House says its aim will be to “facilitate information flow between semiconductor producers and suppliers and end-users”, improving transparency and data sharing.
- Enhanced relationships with foreign allies, including Japan and South Korea will also be strengthened with the express proposed of increasing chip output, promoting further investment in the sector and “to promote fair semiconductor chip allocations”.